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Australian Agricultural Company Limited ABN 15 010 892 270
AACO FY14 ANNUAL GENERAL MEETING PRESENTATION
ASX Announcement No. 20/2014 17 July 2014 Attached is a presentation for the Annual General Meeting of the Australian Agricultural Company Limited (‘AACo’) to be held today. Media enquiries: Andrew Butcher 0400 841 088 [email protected]
• Australia's largest cattle and beef producer –strategic asset base comprising a herd of approximately 541,000 head (30 Jun 14) and operates a property portfolio across ~6.5 million hectares of land
• High quality, traceable product with secure supply channels for offshore customers
• Close proximity to growing markets in Asia
• Australia’s largest producer and marketer of Wagyu cattle and beef
AACo fundamentals Historical constraints
• Volatile domestic cattle markets affected by variable climatic conditions
• Majority of assets concentrated in capital intensive primary production, limiting return on assets
• Impact of government policy e.g. live export ban
• Concentrated ownership of beef processors on the east coast
• Logistics costs to east coast processors
• Lack of price hedging instruments unlike other commodities
–
–
–
–
•
•
•
•
•
•
Backgrounding/Feedlots
Live Sales
Branded Beef
Production
Processing
Sales, Marketing &
Distribution
Purchasing
Logistics
GrassfedProperties
Pastoral
• Wagyu• Shortfed/Other
3rd Party Processors
Margin
Margin
Backgrounding/Feedlots
Darwin Facility
Live Sales• Wagyu• Shortfed/Other
3rd Party Processors
Grainfed
Production
Processing
Sales, Marketing &
Distribution
Purchasing
Northern Beef Grassfed
Logistics
Grassfed PropertiesYoung Cattle
ManufacturingBeef
Margin
Margin
Margin
GrassfedGrainfed
Capital Employed ~$200m ~$100m ~$800m
Main Product Differentiated, branded beef Quality manufacturing beef Live cattle sales
Key Drivers • Global beef prices• Grain prices• Marketing / Branding• Feedlot efficiency• Processing costs• FX
• Global beef prices• Domestic cattle prices and
security of supply• Operating efficiency• FX
• Climatic conditions• Domestic cattle prices• Operating efficiency• Government policy• Market options
Northern Beef
(mil kg lwt***)3 months to June 30 2014
3 months to June 30 2013
KG produced 6.4 4.9
Cattle purchases 5.1 2.5
3 months to June 30 2014
3 months to June 30 2013
Wagyu sold (mil kg sw*) 2.6 2.1
Wagyu sold ($/kg sw) $12.46 $11.80
Shortfed/Other (mil kg sw) 2.9 1.7
Shortfed/Other ($/kg sw) $7.62 $7.18
Cattle exiting Feedlots/Backgrounding (kg cwt**)
0
50
100
150
200
250
300
350
400
Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14
Sorghum Brisbane
APW Brisbane
F1 Barley Brisbane
Spot Grain Prices (Index)
* sw = shipped weight of beef** cwt = carcase weight*** lwt = live weight
0.1
1.6
0.3
0.7
0.3
0.6
0.5
0.13.8
3.1
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Q1 FY15 Q1 FY14
mil
kg c
wt
Wagyu AAco value-added
Shortfed AACo value-added
Wagyu Live Sales
Shortfed Live Sales
Other Live Sales
85%
15%
Q1 FY15 (5.0m kg cwt)
53%
47%
Q1 FY14 (6.0m kg cwt)
Imported 90 CL Frozen
Aerial Photo of Darwin Facility - July 2014
200
250
300
350
400
450
500
550
Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul
2011 2012 2013 2014
(A¢
/kg)
External Cattle Sales / Internal Transfers (kg lwt)
Live Export Market (Indonesian Light Steer Prices)
50
70
90
110
130
150
170
190
210
230
250
Jan
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
Dec Jan
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
Dec Jan
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
Dec Jan
Feb
Mar
Ap
r
May Jun
Jul
2011 2012 2013 2014
(A¢/
kg lw
t)
(mil kg lwt)3 months to June 30 2014
3 months to June 30 2013
KG produced 18.8 23.6
External sales 5.7 28.5
Purchases 3.9 0.4
1.4 2.2 3.0 2.4
2.4
10.2
1.5
11.6
1.8
6.8
10.2
33.2
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Q1 FY15 Q1 FY14
mil
kg lw
t
Live Export Sales
Grassfed Sales
Store Sales
Other - Transferred to Grainfed
Wagyu - Transferred to Grainfed
(‘000 head)3 months to June 30 2014
3 months to June 30 2013
Closing Breeding Herd 285 310
Calves branded 73 89
